If cess is excluded, allocations for health & education shrink

The health and education cesses were meant to enhance outlays for these crucial sectors but an analysis of Budgets since their introduction shows that their share in total government expenditure remains at about the same level as when these cesses did not exist.

- Atul Thakur & Rema Nagarajan

In effect, therefore, the cesses have largely replaced rather than adding to normal outlays.

Education cess was introduced in 2004-05. At that time, even without the cess the education outlay was 2.3% of the government’s total expenditure. The present allocation of Rs 1.04 lakh crore in Budget 2022-23 amounts to 2.6% of total expenditure. While this seems like an improvement, it actually includes over Rs 62,000 crore coming from the education cess. At 2.3% of the total Budget expenditure, the 2022-23 education allocation would have been over Rs 91,000 crore. Instead, this year’s budgetary allocation, excluding the portion funded by the cess, is just about Rs 42,000 crore, less than half that amount.